WAM Capital Ltd. · ASX:WAM
WAM Capital — Investor Presentation (November 2016)
38 slides from WAM Capital's investor presentation, Nov 16, 2016
Slide 1: For personal use only
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Slide 2: November 2016 Shareholder Presentation
For personal use only November 2016 Shareholder Presentation
Slide 3: Disclaimer
For personal use only Disclaimer This presentation has been prepared by MAM Pty Ltd and Wilson Asset Management (International) Pty Ltd (Wilson Asset Management) for use in conjunction with a verbal presentation and should be read in that context. This presentation Information for the graphs, charts
Slide 4: Agenda
For personal use only Agenda 1. Wilson Asset Management 3. Investment portfolio and our listed investment companies – What worked – What didn’t work 2. Market and investment insights – What we like – Market overview and outlook – Investment themes and trends 4. Questions Page 4
Slide 5: About us
For personal use only 1 About us Page 5
Slide 6: About us
For personal use only About us Investing in opportunities. For you. For good. 1 Page 6
Slide 7: Our team
For personal use only Our team Geoff Wilson Kate Thorley Chris Stott Matthew Haupt Chairman Chief Executive Officer Chief Investment Officer Portfolio Manager & Portfolio Manager & Portfolio Manager Martin Hickson Tobias Yao John Ayoub Oscar Oberg Senior Equity Analyst Senior Equity Analyst Senior E
Slide 8: How we invest
For personal use only How we invest Page 8
Slide 9: WAM Capital key metrics
For personal use only Pre-tax net tangible assets One-year total shareholder return 197.56c 23.6% Fully franked dividend yield* Performance (p.a. since August 1999) 6.4% 18.2% As at 31 October 2016 Page 9 *As at 14 November 2016
Slide 10: Fund key metrics: NTA, gross assets, share price
For personal use only Pre-tax net tangible assets Gross assets 107.77c $388.6m Share price* Option price* $1.115 $0.039 As at 31 October 2016 Page 10 *As at 14 November 2016
Slide 11: Fund key metrics: NTA, return, dividend yield
For personal use only Pre-tax net tangible assets One-year total shareholder return 129.17c 28.4% Fully franked dividend yield* Performance (p.a. since July 2010) 5.4% 21.0% As at 31 October 2016 Page 11 *As at 14 November 2016
Slide 12: Fund key metrics: NTA, return, dividend yield
For personal use only Pre-tax net tangible assets One-year total shareholder return 105.14c 26.5% Fully franked dividend yield* Performance (p.a. since January 2008) 4.4% 12.9% As at 31 October 2016 Page 12 *As at 14 November 2016
Slide 13: Market and investment insights
For personal use only Market and investment insights 2 Page 13
Slide 14: Market and investment insights
For personal use only Market and investment insights 2 Page 14
Slide 15: Market outlook
For personal use only Market outlook Page 15
Slide 16: The Australian equity market: Is a correction coming?
For personal use only The Australian equity market Is a correction coming? Page 16
Slide 17: The Australian equity market: Is a correction coming?
For personal use only The Australian equity market Is a correction coming? Signs of economic strength are returning… … but are not strong enough for the RBA to raise rates – yet … when it does, equities could come under pressure Valuations remain elevated given the growth outlook Page 17
Slide 18: Will small caps continue to outperform?
For personal use only The Australian equity market Will small caps continue to outperform? Page 18
Slide 19: Will small caps continue to outperform?
For personal use only The Australian equity market Will small caps continue to outperform? S&P/ASX 100 S&P/ASX Small Ordinaries Relative performance 1900 1900 2013 2014 2015 2016 Source: Goldman Sachs Page 19
Slide 20: Australian housing has peaked
For personal use only The Australian economy Australian housing has peaked Page 20
Slide 21: Australian housing has peaked
For personal use only The Australian economy Australian housing has peaked Housing Australian housing approvals approvals 21000 18500 16000 13500 11000 8500 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Source: Australian Bureau of Statistics Page 21
Slide 22: The era of cheap money is ending
For personal use only The global economy The era of cheap money is ending Page 22
Slide 23: The era of cheap money is ending
For personal use only The global economy The era of cheap money is ending 10-year government bond rates % Centrals banks have attempted 8 to stimulate the economy post 7 6 GFC with monetary policy 5 Printing money to provide liquidity 4 3 Lowering interest rates 2 1 0 Causing significant overvaluati
Slide 24: Outcome of the US election
For personal use only The global economy Outcome of the US election Page 24
Slide 25: Outcome of the US election
For personal use only The global economy Outcome of the US election Uncertainty on policy decisions and execution; slim Republican majority Tax reform and infrastructure building could create fiscal stimulus Trade protectionism would have negative impacts US economic indicators and company earnings
Slide 26: Investment themes and trends
For personal use only Investment themes and trends Page 26
Slide 27: The rise of self managed super funds
01 For personal use only The rise of self managed super funds Page 27
Slide 28: The rise of self managed super funds
For personal use only 01 The rise of self managed super funds 1/3 of all superannuation assets are held in SMSFs $622bn of assets under management 16% of the market cap of the ASX is owned by SMSFs Investment exposure: Source: Credit Suisse Page 28
Slide 29: Cashless society and online shopping
For personal use only 02 Cashless society and online shopping Page 29
Slide 30: Cashless society and online shopping
For personal use only 02 Cashless society and online shopping Integrated the best retailers neither exclusively online or offline Decelerated rate of growth in online shopping Transition from bricks-and-mortar to clicks-and-mortar Payments technology bring convenience and efficiency to electronic tr
Slide 31: Top holdings
Top holdings For personal use only Company ASX Code Owned by Eclipx Group Limited ECX WAM, WLE, WAX Nick Scali Limited NCK WAM, WAX Orora Limited ORA WLE Reliance Worldwide Corporation (Aust) Limited RWC WLE Ardent Leisure Group AAD WAM, WLE, WAX Aristocrat Leisure Limited ALL WAM, WLE, WAA Hellowor
Slide 32: Investment portfolio
For personal use only Investment portfolio 3 Page 32
Slide 33: What worked: Mayne Pharma
For personal use only What worked Sold out average $1.94 Mayne Pharma (ASX: MYX) Why it rated $2.10 – Highly accretive acquisition $1.90 – Growth potential $1.70 – Pipeline of drugs awaiting FDA approval $1.50 Started buying at $1.30 $0.62 Why it worked $1.10 – Successful execution on acquisition $0
Slide 34: What didn't work: The Reject Shop
For personal use only What didn’t work The Reject Shop (ASX: TRS) $17.00 Sold out average $9.27 Why it rated $15.00 – Appointment of CEO Ross Sudano – Cost reducing strategies $13.00 Why it didn’t work $11.00 Started buying at $5.87 – Impacted by price competition $9.00 – Sales growth disappointing
Slide 35: What we like: Armidale Investment Corporation
For personal use only What we like Armidale Investment Corporation (ASX:AIK) $0.18 Background $0.17 – Integrated commercial finance company $0.16 – $42 billion industry $0.15 Started buying at $0.11 Catalysts $0.14 – Simplifying corporate structure to a tax $0.13 consolidated group $0.12 – Transitio
Slide 36: What we like: Nick Scali
For personal use only What we like Nick Scali (ASX: NCK) $6.00 Background – Furniture retailer with 42 stores $5.50 – Market cap $450 million Started buying at – Block line purchased at a discount $5.00 $3.80 Catalysts $4.50 – Acquisitions overseas – Earning upgrades $4.00 – Continued Australian mar
Slide 37: Questions
For personal use only 4 Questions Page 37
Slide 38: Get in touch
For personal use only Get in touch info@wilsonassetmanagement.com.au Telephone. +61 2 9247 6755 Level 11, 139 Macquarie Street Sydney NSW 2000 GPO Box 4658, Sydney NSW 2001